Comptroller Sends $195M CUNY Deal Back for Work

Last spring, the Research Foundation of CUNY worked out a tasty exclusive deal with the city Human Resources Administration and Department of Employment: $195 million over the course of three years to cut checks to trade schools and nonprofits that train New Yorkers for jobs.

But in an unusual move, City Comptroller William Thompson has decided to reject the Bloomberg administration’s contract with CUNY.

It turns out that CUNY’s performance has been the subject of widespread complaints from job trainers who’ve been waiting up to a year for payments. Both HRA and DOE issue Individual Training Account vouchers–funded through the federal Workforce Investment Act–to clients looking to improve their job skills, who then trade them in for training courses at schools. Until its prior contract expired in June, CUNY was charged with making sure the schools got paid back.

Oleg Rabinovich, trustee of the Manhattan School of Computer Technology, says his school didn’t get paid until July for vouchers it submitted to CUNY in December 2001. He is waiting on $196,625 in claims filed starting in early summer.

What prompted the comptroller to nix the contract, a letter obtained by City Limits reveals, was evidence that CUNY was getting exceptionally special treatment: According to the Research Foundation, HRA had agreed to waive its usual penalties for late payments.

“Research Foundation contract supervisor Donald Menzi…informed the staff that Research Foundation had previously requested and received a contract rider at the beginning of contract negotiations,” wrote Assistant Comptroller John Graham to HRA Deputy Commissioner Sandra Glaves-Morgan in late September. “We were told by Mr. Menzi that as a result of the rider there were no performance standards for voucher payments remaining in the contract.”

HRA indicated no such exemption to the comptroller. Instead, consistent with HRA and DOE’s standard practice of linking payment to performance, the signed contract sent to the comptroller for approval promised that if CUNY fell more than five days behind on a voucher payment, it would pay a $2-a-day penalty to the city.

Contacted by City Limits, Menzi acknowledged that he told the comptroller’s staff about a rider waiving performance requirements, but now says he spoke inaccurately. “It was based on an assumption I had based on an initial meeting,” he said, refusing to say whom the meeting was with or what was discussed there.

Menzi says that he’s well aware of the prior delays, which he attributes to “a multi-step process for us to process invoices.” The new contract–under which CUNY would keep about $8.5 million for its own costs–aims to solve those problems, he added, by paying CUNY directly. He hopes to get turnaround down to 30 days. He’d better: One source who reviewed the deal notes that with upwards of 15,000 vouchers slated to be distributed, “if they kept up their current rate of delay, [the fines] would suck them dry.”

Asked whether he’s had to lay anyone off as a result of the contract hold-up, Menzi said he had been using temp workers.

HRA, too, says that there was never a special agreement: “HRA did not agree to stop performance standards,” said spokesperson David Neustadt. Following the expiration of the prior contract, Neustadt added, HRA took over administration of the voucher program, but it has now resumed contract discussions with CUNY.

Those voucher dollars need to move somewhere fast: New York City must spend $73 million in federal workforce funds by next July or risk losing funding. And job trainers say something’s got to give. Maria Duran of Career Blazers reports that her school is waiting on $300,000 for vouchers submitted since August 2001. “It’s very, very hard,” said Duran. “It’s like a mess here.”

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